Western Power & Equipment Reports Results for the Second Fiscal Quarter
VANCOUVER, Wash.--March 17, 2005--Western Power & Equipment Corp. (OTCBB:WPEC), a dealer of construction and industrial equipment, today reported revenues for the three-month period ended January 31, 2005 were $30.34 million, an 8.5 percent increase from the $27.96 million for the three-month period ended January 31, 2004. The Company reported net income of $117,000 or $0.01 per share (basic and diluted) compared with a net loss of ($238,000) or ($0.02) per share (basic and diluted) in the prior year's comparative quarter. This is the first time in several years that the Company has reported a profit in its second fiscal quarter."Revenues are up from last quarter and the prior year's comparative period as a result of an improved economy and by simply becoming lean and mean," said C. Dean McLain, President and Chief Executive Officer of the Company. "Even though the second quarter is historically low for Western, the company managed to improve revenue and report a profit as it continues on its turnaround path. Additionally, we have signed a letter of intent with Congress Financial for $37 million in senior debt financing and anticipate signing agreements for $3-6 million with tranche B sources this month to replace the GE credit facility. We'll also infuse additional equity into the company by coming to an agreement with a private investor source over the next couple of months. Western is positioned to make continued progress in financial performance and increased shareholder value over the fiscal year."
Revenues for the six-month period ended January 31, 2005 increased 2.5% to $57.0 million compared with $ 55.7 million for the six-month period ended January 31, 2004. The Company had an 84% increase in net income for the six months ended January 31, 2005 reporting net income of $636,000 ($0.06 per basic share and $0.05 per diluted share) compared with a net income of $346,000 ($0.03 per basic and diluted share) for the prior year's comparative period.
Western returned to profitability in its fiscal year ending July 31, 2003 and continues to be profitable. The Company had previously announced that its fiscal year 2004 (ended July 31, 2004) net income was $1.9 million, a 364% increase from the previous fiscal year.
About Western Power & Equipment Corp.
Western Power & Equipment Corp. sells, leases, rents, and services construction and industrial equipment for Case Corporation and over 30 other manufacturers. The company currently operates 15 facilities in Washington, Oregon, Nevada, California, and Alaska. Western is publicly traded on the NASDAQ Over The Counter Bulletin Board (OTCBB). For more information, please contact the company at 6407-B N.E. 117th Avenue, Vancouver, WA 98662; telephone, 360-253-2346; fax, 360-253-4830; email: webmaster@westernpower.com; or visit the company's web site http://www.wpec.com.
Cautionary Note Regarding Forward-Looking Statements
Information contained herein relating to projected revenues, growth, income, potential costs savings, and future results and events constitute forward-looking statements. Actual results may differ materially from the forward-looking statements because of a number of risks and uncertainties, including but not limited to fluctuation in the construction and industrial sectors and general economic cycles; the success of the Company's entry into new markets; the success of the Company's operation of the acquired business; industry conditions and competitors; competitive pricing; the Company's relationship with suppliers; relations with the Company's employees; the Company's ability to manage its operating costs and to integrate the acquired businesses in an effective manner; the continued availability of financing; governmental regulations and environmental matters; and risks associated with regional, national, and world economies. Any forward-looking statements should be considered in light of these factors.
WESTERN POWER & EQUIPMENT CORP. & SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
January 31, July 31,
2005 2004
-----------------------
(Unaudited)
ASSETS (PLEDGED)
Current assets:
Cash and cash equivalents $ 9 $ 9
Restricted Cash 623 408
Accounts receivable, less allowance for
doubtful accounts of $906 and $938,
respectively 7,551 11,660
Inventories 26,422 28,938
Prepaid expenses 223 205
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Total current assets 34,828 41,220
Fixed assets:
Property, plant and equipment (net) 3,426 2,620
Rental equipment fleet (net) 9,717 11,053
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Total fixed assets 13,143 13,673
Other assets 169 131
------------ ----------
Total assets $ 48,140 $ 55,024
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LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Borrowings under floor plan financing $ 10,119 14,561
Short-term borrowings 23,690 31,710
Convertible debt 50 50
Notes payable 2,317 12
Accounts payable and accrued expenses 7,638 5,461
Accrued payroll and vacation 654 1,194
Other accrued liabilities 931 1,005
Capital lease obligation 28 27
------------ ----------
Total current liabilities 45,427 54,020
Long-term liabilities
Notes Payable 543 49
Deferred Lease Income 278 0
Capital lease obligation 836 853
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Total long-term liabilities 1,657 902
------------ ----------
Total liabilities 47,084 54,922
------------ ----------
Stockholders' equity:
Preferred stock-10,000,000 shares
authorized; none issued and outstanding -- --
Common stock-$.001 par value; 20,000,000
shares authorized; 10,260,300 issued and
10,130,000 outstanding 10 10
Additional paid-in capital 17,321 16,933
Deferred compensation (72)
Accumulated deficit (15,359) (15,997)
Less common stock in treasury, at cost
(130,300 shares) (844) (844)
------------ ----------
Total stockholders' equity 1,056 102
------------ ----------
Total liabilities and stockholders' equity $ 48,140 $ 55,024
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WESTERN POWER & EQUIPMENT CORP. & SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Dollars in thousands, except per share amounts)
Three Months
Ended
January 31,
2005 2004
------- -------
Net revenue $30,341 $27,960
Cost of revenues (includes depreciation of
$935 and $989, respectively) 27,346 25,147
------- -------
Gross profit 2,995 2,813
Selling, general and administrative expenses 2,448 2,427
------- -------
Operating income 547 386
Other income (expense):
Interest expense (717) (690)
Other income 299 78
------- -------
Income (loss) before income tax provision 129 (226)
Income tax provision 12 12
------- -------
Net income (loss) $ 117 $ (238)
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Basic earnings (loss) per common share $ .01 $ (0.02)
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Diluted earnings (loss) per common share $ .01 $ (0.02)
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WESTERN POWER & EQUIPMENT CORP. & SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Dollars in thousands, except per share amounts)
Six Months Ended
January 31,
2005 2004
------- -------
Net revenue $57,085 $55,693
Cost of revenues (includes depreciation of
$2,640 and $2,602, respectively) 50,759 49,311
------- -------
Gross profit 6,326 6,382
Selling, general and administrative expenses 4,673 4,750
------- -------
Operating income 1,653 1,632
Other income (expense):
Interest expense (1,340) (1,412)
Other income 347 150
------- -------
Income before income tax provision 660 370
Income tax provision 24 24
------- -------
Net income $ 636 $ 346
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Basic earnings per common share $ 0.06 $ 0.03
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Diluted earnings per common share $ 0.05 $ 0.03
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